.jpg)
- At recent Summits, G20 Leaders asked the FSB to develop a policy framework to address the systemic and moral hazard risks associated with systemically important financial institutions (SIFIs).
- In Seoul last year, G20 Leaders endorsed this framework and the timelines and processes for its implementation. The development of the critical policy measures that form the parts of this framework has now been completed. Implementation of these measures will begin from 2012. Full implementation is targeted for 2019.
- SIFIs are financial institutions whose distress or disorderly failure, because of their size, complexity and systemic interconnectedness, would cause significant disruption to the wider financial system and economic activity. To avoid this outcome, authorities have all too frequently had no choice but to forestall the failure of such institutions through public solvency support. As underscored by this crisis, this has deleterious consequences for private incentives and for public finances.
Click here for full details.
